This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank Stocks to Buy Now (Maybe)

We used different data for thrift holding companies. For bank holding companies, the table includes data from Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) filed with the Federal Reserve.

Since thrift holding companies don't file a uniform set of numbers at the holding company level, we used thrift financial report data for the companies' main subsidiaries:

  • For People's United Financial (PBCT - Get Report), the data is for People's United Bank of Bridgeport, Conn, although People's United holds several other thrifts, which are much smaller.
  • For Hudson City Bancorp, we used data for Hudson City Savings Bank.
  • For TFS Financial Corp (TFSL), the data is for Third Federal Savings and Loan of Cleveland, Ohio.
  • For Capitol Federal Financial, the data is for Capitol Federal Savings Bank of Topeka, Kan.

The ratio of nonperforming loans and debit securities to core capital and loan loss reserves (here adjusted for government-guaranteed loan balances) is also known as the "Texas Ratio." A level over 20% is often considered excessive, and two holding companies, Bank of America and SunTrust Banks (STI) had Texas ratios exceeding 20% as of Dec. 31.

Of course, the additional $30 billion in funds Bank of America received through the Troubled Asset Relief Program during the first quarter of 2009 are not included in the Texas ratio. After March 31 numbers become available, when we factor in the additional capital new assets from the Merrill acquisition and the government's backstop on losses from some of the Merrill assets, the company's financial picture will change.

Northern Trust

Northern Trust (NTRS - Get Report) had the lowest Texas ratio on the list, coming in at 1.76%. Its strong standing is reflected in its share price and price-to-book ratio, as both are fairly expensive.

Northern Trust's numbers reflect its primary role as a private bank, with loans comprising only 37% of total assets as of Dec. 31. Nonperforming assets comprised just 0.15% of total assets -- the best overall asset quality ratio on the list.

Still, the company's price-to-book ratio of 2.48 looks quite high in the current environment, and its $1.6 billion infusion of TARP money illustrates the headline risk associated with taking the government's money, especially for a company whose business model requires it to "wine and dine" wealthy clients.

Following the media's indignation over its continued sponsorship of the Northern Trust Open golf tournament in Los Angeles, the company said Friday it would repay the Treasury all of the TARP money as soon as possible.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HCBK $0.00 0.00%
BAC $14.61 -1.20%
C $46.28 0.00%
CFFN $13.29 0.00%
NTRS $71.08 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs